Posted
by
Soulskillon Tuesday November 26, 2013 @04:04PM
from the battle-lost-war-continues dept.

Jah-Wren Ryel sends this quote from Ars:
"Newegg, an online retailer that has made a name for itself fighting the non-practicing patent holders sometimes called 'patent trolls,' sits on the losing end of a lawsuit tonight. An eight-person jury came back shortly after 7:00pm and found that the company infringed all four asserted claims of a patent owned by TQP Development, a company owned by patent enforcement expert Erich Spangenberg. The jury also found that the patent was valid, apparently rejecting arguments by famed cryptographer Whitfield Diffie. Diffie took the stand on Friday to argue on behalf of Newegg and against the patent. In total, the jury ordered Newegg to pay $2.3 million, a bit less than half of the $5.1 million TQP's damage expert suggested. ... TQP's single patent is tied to a failed modem business run by Michael Jones, formerly president of Telequip. TQP has acquired more than $45 million in patent licensing fees by getting settlements from a total of 139 companies since TQP argues that its patent covers SSL or TLS combined with the RC4 cipher, a common Internet security system used by retailers like Newegg."

Is there anywhere else you should buy computer parts from? Their hardware all seems to be competitively price, and their customer service is outstanding. My buddy bought a mouse at Best Buy that didn't work. When they didn't take it back, Newegg did and gave them a full refund.

Is there anywhere else you should buy computer parts from? Their hardware all seems to be competitively price, and their customer service is outstanding. My buddy bought a mouse at Best Buy that didn't work. When they didn't take it back, Newegg did and gave them a full refund.

Lately, I've found that Amazon usually meets or beats Newegg's pricing for most things I buy, with free 2 day shipping (for Prime members). Even when NewEgg does offer free shipping, it's their "Standard 5 -7 days shipping" - I don't purchase enough things that Newegg carries to make it worth signing up for their $79/year "Shoprunner" service that provides 2 day shipping on many items.

Lately, I've found that Amazon usually meets or beats Newegg's pricing for most things I buy, with free 2 day shipping (for Prime members).

This was when I stopped using Newegg as well - the moment my wife signed us up for prime. We actually did it for the video and kindle, but once you experience free shipping like that it's pretty hard to accept anything else.

Add in that they allow me to pay using my Discover card rewards right at checkout and it's a dangerous combo.

So we have an article that talks about a company "sticking it to the man" (even if they lost) and then we have some/. locals come on to talk about how great "the man" is (Amazon) because their size allows them to offer slightly cheaper prices on stuff.

It's a bit like seeing a live performance of "Run Like Hell" and everyone in the audience is clapping because Waters said you should.

Or one day, amazon will be all that's left. You want that? I agree that many small businesses are badly run, and often can't or don't get the service right, but if you end up with only one or two massive impersonal players, you will regret it. That means, noiw, today even, making a choice to stop that happening by buying from the small guys even if that means paying a couple of dollars more.

Amazon is no stranger to patent trolls, since it also is a patent troll. One-click shopping, anyone?

I have never bought ANYthing from Amazon, and NEVER will. While I won't go all over-the-top Scott Adams on Amazon customers and wish them die a slow, painful death, I most certainly am happy to wish it on Amazon as a corporation. Though not a slow death; a quick one. The sooner, the better.

I'd argue that there's a difference between Amazon and a true patent troll.

Trolls usually don't use the patent they own and use it solely as an investment tool.

Whatever you think of Amazon, they use the patents they hold. Maybe they enforce it, maybe they use it as leverage in case a competitor sues them (IBM, Microsoft, Intel, AMD, etc. all do this as well.).

That's not to say the one-click patent is valid or not, but I don't think I'd call Bezos a troll for patenting the idea.

I assume you do this after you used Newegg to search for the item. Because Amazon's search engine doesn't have 1% of the power that Newegg's has. I can't go to Amazon and find out which video cards use a 4-pin power connector versus a 6-pin. Stuff like that is what makes newegg awesome.

Not to detract from the larger issue, but my first credit card was Discover and it's still my primary, 15 years later. Their customer service is great, their call centers are in the United States, and I simply prefer dealing with them over Capital One or any of the other megabanks.

They offer 5% cashback bonus categories rotating quarterly and even a cashback referral revenue sharing program similar to Ebates or Fatwallet. I earned $50 just on my last statement - all of which will be spent at Amazon.

Every purchase over $100 goes on it as well as most restaurant and gasoline purchases.

Also check out camelcamelcamel.com and camelegg.com. Now we just need a site where you enter your build and it puts together order lists from newegg and amazon to optimize for price. Ideally it would also search for near substitutes (different brands of value ram for instance) and build your shopping cart for you.

Well, I'm generally extremely skeptical of such claims in reviews, since people are generally idiots and don't understand why claims are refused to begin with. BUt for sure the rate of complaints about "drive was shipped with no padding, arrived broken" are on the rise at Newegg. It's to bad too, as no good can come of Amazon having an effective monopoly over any product space.

This. Exactly. I'd rather pay Newegg a few bucks more knowing that those bucks will be spent fighting patent trolls than saving a few bucks at Amazon knowing that the reason they're able to offer prices a few bucks lower is because they sued some other company out of existence for having the audacity to put a button on their web page that charges your credit card and checks you out in one action.

I hope their RMA department has stopped intentionally bending pins in the CPU socket to avoid having to replace the boards for their customers. I'll never buy from them again.http://hardforum.com/showthread.php?t=1694667 [hardforum.com]

Sometimes Amazon has stuff for like 4 dollars less, but their prices are different at different times of the day and sometimes (rarely) even when browsing their site with different browsers. Really, it's trust; I trust Newegg, I don't trust Amazon.

you may think it goes thru some kind of sanity checking or testing but they DO NOT TEST. NOT EVER.

I got a bad ssd (someone must have done their own, (cough) testing of the ssd before returning it) and I got stuck with this dud. when I complained newegg told me they never test customer returns. I was shocked! and they did nothing for me since it was over 30 days before I found that the ssd was worn out.

While a bit old, it's still valid [nytimes.com]. Sorry to hear about your luck, I've been bitten by return periods (with brakes) but I ended up reselling them on my own. As far as computer components, I prefer to buy those from a walk-in retailer like Microcenter. They're right down the street from me and I prefer being able to do returns same day if th

I was a long time Newegg customer and fan until my Black Friday laptop two years ago. They shipped me a DOA unit (which was a common issue in this model as comments after Black Friday revealed). They were reasonably quick to suggest a few basic troubleshooting items and issue an RMA. Then it went to hell. Long story short, they received my laptop then lost it. They lied to me repeatedly, blamed it on the carrier, refused to cooperate with the carrier (who was willing to cover it despite the obvious problems

As a former Fry's employee (before they built that giant Fremont store) I'm not sure where you get this concept of hassle free RMA/returns. Even when I worked there and was a model employee they would give me the run around if I was returning something I bought there. I even had returns refused because, "you work in computer service, don't you? You must have broken this trying to modify it".

I was even stopped by their loss prevention guys and almost fired because I borrowed a burned diagnostic CD from a co

Hopefully this turns out to be good advertising for NewEgg - I know I'll be making my next computer purchase from them to help support them in fighting a patent troll.

Newegg follows a 'no protection money to trolls' policy generally. Plus, they ship fast and always seem to be within a few percent, plus/minus, of the going rate (aside from occasional retail loss leaders, or the 'you can get 20 USB cables for a dollar, on the slow boat from China' ebay deals). Microcenter FTW for retail; but they make a fairly compelling case for online purchases.

Amazon.com charges a restocking fee under exactly the same circumstances that Newegg does

No they don't, unopened items returned within the return window are refunded in full, minus the return shipping cost if the return was a result of an error made by the customer. You only eat a percentage of the product if it's returned outside of the usual 30 day return window, which is certainly fair.

In Newegg's case, they attempted to tried to ding me 15% of an unopened $600 video card, despite their CSRs claim that they would waive the fee. The return was completely my fault, I ordered the wrong card, and was open about that fact during my communication with them. I initially reached out to them in the hope that they would simply recall the shipment, since I hadn't received it, but they claimed this was impossible. They also told me that I could not refuse delivery (an option with Amazon, FYI), because that would be a return without an RMA, and suggested I go through the standard RMA process. I asked what would happen, they said I would get a total refund and only be on the hook for return shipping, which was more than I expected (eating the S/H charges in both directions would have been fair, since the mistake was mine), but I assumed they were being nice since I had placed an order for the correct card prior to calling on the bad one.

Imagine my surprise when I got my credit card statement and found the restocking fee. Numerous phone calls ensued, wherein every single person that I talked to refused to honor the deal. Escalated to supervisors, who also refused to honor the deal, escalated again to people that never returned phone calls. Offered to provide a recording of the original call, but was told that it would be "irrelevant", because the CSR "exceeded his authority", as if that's my problem. I ultimately had to dispute the charge with my credit card company, and the only reason I prevailed there was because of the aforementioned recording.

The best part? A few weeks later I get an e-mail telling me that I'm prohibited from doing business with them, because of the chargeback. Their prerogative I suppose, but none of it would have happened if they had simply honored their CSRs original promise.

We can fight these stupid decisions coming out of east Texas one by one, or we could be smarter about it. We can try for patent reform, but the $$ involved, they will probably find a way around that as well.
How about we start a PR fund with the goal of flooding the East Texas jury pool (buy TV/Radio/Newspaper/Internet in that geography) explaining why this is bad to the people that will be sitting in the jury box. Explain that it's actually killing small, successful companies, and only enriching the trolls/lawyers who actually did nothing. Call it carpetbagging - should resonate with Texans.

Playing devil's advocate here... Why is this result some failure of the judge/jury of this case? Like it or not, this patent has previously been granted by the patent office. Jurors and judges don't get to invalidate patent claims because of some flaky idea of who is trolling who. Rather, they have to follow a more or less established legal process, regardless the side they may otherwise be rooting for.
You want a "Bad Guy" for this event? Blame Congress, as current law incentivizes patent reviewers to accept questionable patent applications, and the number of years granted to these patents are too many.

Actually I've often wondered why people dont sue the USPTO for that or something similar.I read somewhere that in the US if you sue the police and win, you cant get legal costs awarded too, so consequently not may people risk suing the police.Is it the same with any government agency? (i.e. including the USPTO?)

The most amazing thing is that TQP's argument against Diffie involved them finding potential prior art to show that Diffie wasn't the inventor of public key cryptography. Even if this argument succeeded, then it should have put an even bigger nail in their coffin since it would show even more prior art for the patent.

This really was the worst kind of patent too. So I see you're doing asymmetric crypto for key transfer...but ah ha, I got a patent for asymmetric crypto for key transfer using RC4! Checkmate! Like wow, you applied the most common (at the time) algorithm to a system that kind of resembles a SSL connection, except that it's with modems and came a few years after the big Diffie-Helmann paper.

And of course they aren't suing the people who made the SSL offload appliances that got NewEgg into trouble, they're suing all of their customers, for using the thing with the default settings. And they're calling it willful infringement because they didn't go an explicitly disable the RC4 feature to comply with a patent they knew nothing about.

Public Key Cryptography is just another of the many things that the US claims they invented, but was actually invented by the British and just 'better marketed' by the US.However as the British research was for the UK government/military it was kept secret until sometime after the conference where Diffie anounced his own research. It is terefore clear that Diffie/Helmann were acting completely independently of the British work and also announced it first.

It wasn't better marketed, it was created and made available by Diffie. That 'and' is important here. The British kept it secret that they even done it until '97. This is an example of parallel invention, only in this case one side made it known he had created it and the other didn't. For creating and publicizing Diffie is correctly attributed as the co-creator of Public Key Cryptography.

The most amazing thing is that TQP's argument against Diffie involved them finding potential prior art to show that Diffie wasn't the inventor of public key cryptography. Even if this argument succeeded, then it should have put an even bigger nail in their coffin since it would show even more prior art for the patent.

TQP's patent wasn't invalid over Diffie's invention alone. Rather, TQP even admits that their patent is a combination of Diffie's work and some other work by Lotus - if the two prior art* references are applied together, then the invention is obvious in light of the combination.

But, their argument was that the Lotus work doesn't legally count, because Lotus kept it secret until after they applied for the patent.

So, as you note, they found some earlier work before Diffie that shows that he wasn't really t

Playing devil's advocate here... Why is this result some failure of the judge/jury of this case?

When the guy who invented public key encryption tells you that the basis of the patent had been around for years, that is a failure of the jury in this case.

Except he didn't, and they didn't. Read page two of this article [arstechnica.com] from yesterday about his testimony.

Basically, TQP admits that their patent is obvious in view of a combination of two references, one of which is Diffie's work, and the other of which was some work by Lotus: neither Diffie nor Lotus invented TQP's invention, but if you slap the two together in a reasonable way, they teach everything in TQP's invention, so it's obvious.

Except, Lotus didn't publish their work until after TQP filed their application. And legally, that means it's not prior art, even though they were working on it in secret for some time. In other words, even though someone else invented what they did, it doesn't count, because that someone else kept it secret.

So, Diffie gets on the stand and talks about his work on crypto, which was the first half of TQP's combination. On cross examination, TQP's lawyer points out that he didn't really invent it, did he? And Diffie says that someone else invented what he did, but it doesn't count, because that someone else kept it secret.

So, it sounds like the jury was persuaded by Diffie that TQP's patent was valid.

The claims weren't really about the encryption. They admitted they did not invent RC4. The claims were about the transactional model (SSL). I still feel it's bogus though, but reading the full articles and history can help.

The real issue may be the locale. Patent trolls love that court house. And no one in the court room was allowed to use the term "patent troll". The juries there seem to love standing up for the little guy who's being bullied by the big company. So the Newegg company and its lawyer, from the distant land of California, versus a locally based company and a lawyer from Dallas. Even the local Marshall Texas newspaper in the article saying that the trial had started took care to point out that the lawyer was from Dallas. Liberal big business California versus local home grown salt of the earth folks.

Jurors and judges don't get to invalidate patent claims because of some flaky idea of who is trolling who. Rather, they have to follow a more or less established legal process, regardless the side they may otherwise be rooting for. You want a "Bad Guy" for this event? Blame Congress, as current law incentivizes patent reviewers to accept questionable patent applications, and the number of years granted to these patents are too many.

If Jurors are expected to be robots helplessly putting up with all measure of insanity placed before them what is the point of having a Jury? In the real world legitimacy matters.

You want a "Bad Guy" for this event? Blame Congress, as current law incentivizes patent reviewers to accept questionable patent applications, and the number of years granted to these patents are too many.

I blame "we the people" for not insisting on campaign finance reform and ending "K" street.

Hanlon's Razor should take priority. But letting patent trolls win on basic encryption technology could be something intended by the government, a first step outlawing strong encryption outside their control everywhere.

I'm wondering if there was any discriminatory thinking by the jury. Probably the troll's technical guy was neat and clean cut versus some hairy bearded academic sounding guy (whether well dressed or not, whether a nice guy or not, whether qualified or not). Average people have built in ideas of what qualified trustworthy 'real' business people look like. People here on/. may not like it, but regular folks do pay attention to that kind of thing and give more credence to people without the long hair and bear

What is somewhat surprising is that Newegg had, as expert witness, Whitfield Diffie, as in 'Diffie-Hellman' Diffie. I didn't even know that it was possible to lose an assymetric-key encryption related case with him on your side, especially against nobody in particular.

It's a quibble, but I'm pretty sure it's symmetric. You use DH to establish a shared secret (the same on both sides). The only assymetric part of ssl is the certificates that are used to prevent man in the middle... I'd hardly call X509 ssl, just a necessary evil (or is it, convergence.io seems dead).

I don't think that there's any doubt that they are. Unfortunately, and I think most people don't really grasp this, being a patent troll in the United States is not just legal, it's extremely lucrative. That's why, while I certainly hope that Newegg eventually successfully appeals this case and continues defending against patent trolls, what we really need is better legislation to make all of this shit illegal.

Is it an appeal? Oh yes it is. These ass-clowns who think they have patents on the internet haven't yet faced the wrath of slashdot's anti-patent group of extremely knowledgeable and resourceful people.

I suspect a few people here with a little time on their hands will be able to prior-art their way to having the patent completely invalidated.

Let's stop this jury are morons myth. The judges gives the jury a list of very specific questions to answer in these cases, taking 2-5 hours. It's not like 12 Angry Men, where people debate what they're heard and sway opinions.

The judge controls the entire jury thought process and has clearly spent a long time crafting the question list beforehand. Being an expert at law, they have already determined the result and knew precisely how to ensure their verdict is the one reached, but they still need to go through the proletarians to reinforce his chosen result.

I've been on jury duty in a bullshit patent suit, and despite the obvious sane result, the judge's contrived question list ensures you cannot come up with any result other than what (s)he has already determined. There is no "let's discuss this" based on what was presented. Any jury not doing so will be kicked out and the trial starts from fresh.

The massive issue here is that this is all behind the scenes, none of it is allowed to become part of the public record, hence posting AC.

I've been on jury duty in a bullshit patent suit, and despite the obvious sane result, the judge's contrived question list ensures you cannot come up with any result other than what (s)he has already determined. There is no "let's discuss this" based on what was presented. Any jury not doing so will be kicked out and the trial starts from fresh.

Meaning a Jury could stall a verdict by doing what is right and debate the issue. correct?

That only has meaning if the jury is already informed. Assuming this jury is like most, all they've got is one guy saying "I invented it" compared to the patent being disputed which essentially says the same thing about another guy.

Maybe there was more to it, like spelling out the patents he was awarded for PKE (if there were any) or journal articles he wrote about it. That sort of thing. But if there wasn't a lot of effort put in to establish his credibility beyond his own words on the stand, then I can

NewEgg's lawyers spent a fair bit of time proving Diffie's claim. They had a textbook, his original paper, and he gave a very informative talk about the early days of public key crypto. I suspect what happened here is that they took TQP's argument to heart that said TQP has a piece of paper that says they own it, so the law says the must find in favor of TQP, despite whatever feelings the jurors might have on the issue.

TQP managed to make the trial about "Did Newegg infringe on this patent?", not "Is this a bad patent that should be overturned?" In that case, the answer is probably a yes.

I suspect TQP's lawyers scored enough doubt with the jurors when they challenged Diffie on whether Ellis, Cocks, and Williamson invented it first (but secretly) at GCHQ. Also they went after Diffie in that he doesn't have an earned doctorate but rather honorary ones. But I wouldn't suspect from a patent troll would play nice.

I still have my original copy of the IEEE journal paper that I clipped in the 1970's. It stood out as a landmark paper then. About 15 years ago, I was at a technical talk and was able to get Martin Hellman to autograph it.

No, someone laid out some thoughts along the right lines in 1973, they wrote a single memo about it which was shelved and forgotten about for 20 years. Diffie independently came up with the same thoughts and actually fleshed them out into a working, practical system. It's the difference between saying "if you burn some stuff, and it goes shooting out this end here... you'll move forward" and the blueprint for a working rocket engine.

I have no idea how in the world anyone with a clue can claim that this patent and SSL using RC4 have anything to do with each other. I just took at look at the linked patent and in a nutshell, what it does is have both parties switch encryption keys multiple times during a transmission by having both parties have identically configured pseudo random number generators which supply the encryption keys (this means that a limited amount of the transmission is encrypted with the same key before the key gets chan

As a developer of original software products, I consider it impossible - just my opinion - to determine if any software I create infringes on existing patents. There are usually thousands and often tens of thousands of ideas, algorithms and design approaches in a product that would need to be checked, and patents are so wordy that the time it would take to determine if there was infringement would always far exceed the time it takes to make the product. This seems to me to pose an undue burden, and is therefore unconstitutional?

As a developer of original software products, I consider it impossible - just my opinion - to determine if any software I create infringes on existing patents.

I'll make it easy for you: it does. Unless you're coding ridiculously simple, run of the mill, junior college project level software, you are violating someone's patents somewhere in your code. Will someone come kicking down your door someday? Probably not, at least, not unless you become successful enough to be worth it.

I'm sure this will really hurt their bottom line. lolI'm surprised Newegg doesn't just buy this company and fire the entire staff with extreme prejudice.

I do a lot of business with newegg. As a hobby I run a small "custom computer" business. I basically started out building computers for my familly and friends... and then it move on to "extended family and friends" and now I do between $10k and $20k in business with them

The problem isn't just parents, it is also that we allow sociopaths to pass the bar exam.

But can't we blame the parents for raising a sociopath?

I'm not a fancy psych expert; but my understanding was that sociopathy is born, not made, though the distinction between the dumb, locally dangerous sociopaths(who will probably kill somebody, maybe more than one; but then end up in prison or going down in a hail of bullets) and the smart, systemically dangerous ones (who would never do anything so crass; and are alarmingly likely to worm their way into positions of influence, may be environmental.

I don't believe that SSL infringes at all. However, RC4 is frequently used as a PRNG (after all, one of it's biggest advantages is to be used as a stream of 'random' numbers to be exclusive ored with the clear text to create the cyphertext which in turn can be xored with an identical stream of bytes at the other end to decrypt. This allows encryption to byte boundaries and doesn't require blocks of 8 bytes to be sent per transmission.) Perhaps that secondary use of RC4 along with the time honored practice o